Port doesn’t have to dump Giants as parking lot developer, city attorneys say

To the anonymous “large, well-respected and highly capitalized development entity” anxious to leapfrog the Giants and build on the port-owned parking lot across from AT&T Park: Nice try.

That’s the gist of a 12-page memo from the city attorney’s office to port Executive Director Monique Moyer, responding to one of the odder legal challenges the city has faced.

Since 2006, port officials have been looking for someone to develop Seawall Lot 337, which is port-speak for the bleak and wind-swept chunk of concrete that makes up the parking lot across McCovey Cove from the stadium. In 2009, a development team led by the Giants was selected as the developer and last April the team presented a plan for a $1.6 billion mixed-use Mission Rock development that would include parks, shops, office space and about 1,000 apartments. Port officials and the team have been working out the details of the agreement ever since.

But in December, port officials received a letter from a big-name law firm of Manatt, Phelps, Phillips, representing the unnamed “development entity,” arguing that because the Giants’ development partner had dropped out, the city was required to dump the Giants as the developer and start all over again.

A new auction of the development rights would allow new — also unnamed — builders to get involved and bring more money to the port, the attorneys said. Not requiring a new “request for proposals” would “reek of backdoor dealings and impropriety.”

There was, however, no explanation as to why the unnamed developer decided to get involved now, when the San Francisco development market is hot, rather than in 2008, when no one wanted to build anything in the city. A Manatt attorney did say, however, that their client was staying anonymous because of concerns that the challenge could be held against them if the bidding was reopened.

The legal problem with the challenge, though, is that no law requires the city to seek new development proposals, city attorneys found, since as a charter city San Francisco sets its own rules on competitive bidding. The original agreement with the Giants also dealt with the potential withdrawal of development partners and port officials properly handled the changes.
“Manatt’s client faces a high hurdle should it attempt to seek relief from the courts,” the attorneys said in their memo.

That doesn’t mean there won’t be a lawsuit sometime in the future, but it does allow the port to continue working out the final details of the development agreement with the Giants.